Probe finds personal ties, old injury aided IRS contractor

A high school injury nearly three decades ago enabled the owner of a contracting company to claim service disabled veteran status last year, opening the door to contracts worth up to a half billion dollars, a House investigation has found.

Braulio Castillo, owner Signet Computers, which has been renamed Strong Castle, injured his ankle in the fall of 1984 during his year at the U.S. Military Academy Preparatory School, but would later go on to play quarterback and linebacker the next year at the University of San Diego, according to a 157-page report Tuesday by the House Committee on Oversight and Government Reform, which will hold a hearing on the contract on Wednesday.

The report said high school football players recruited to play at West Point sometimes enroll in the prep school for a fifth year of high school to “redshirt” and prepare to play college football. Castillo’s injury happened during an orienteering exercise, and his nine months at the prep school represent the entirety of his military career, according to the report.

Still, 27 years later, soon after Castillo purchased a government contracting company, he filed a claim with the Department of Veterans Affairs seeking compensation for a service disability, investigators found.

Once approved, the disability enabled Castillo’s company access to government set asides through the VA’s Service Disabled Veteran Owned Small Business program.

Castillo told a VA examiner weighing the company’s application for entry into the set aside program about the “crosses I bear due to my service to our great country,” according to the report.

He later told congressional investigators that his injury was debilitating over the years and that he’d had three foot fusions. Had Castillo completed his year at the preparatory school without injury, he wouldn’t have been considered a veteran, but a VA official told House investigators that cadets who are injured at school become a veteran due to the service-connected disability, the report said.

The House report also found Castillo’s newly purchased company had no experience with the IRS last year, but still won lucrative information technology contracts worth up to $500 million, in part, because of its status as a HUBZone contractor and Castillo’s relationship with a top IRS contracting official.

Under Small Business Administration rules, a HUBZone, or Historically Underutilized Business Zone, designation gives contractors an edge in competing for federal work if they’re based in certain economically distressed areas.

The SBA revoked Strong Castle’s HUBZone status in May, but has declined to disclose why, saying the decertification letter contains confidential business information.

The House report, however, said the company provided “inaccurate, unreliable and misleading information” to SBA. In a statement to Federal Times prior to the report, company has said it disagreed with the SBA ruling.

The House probe also found that as Strong Castle sought IT work within the IRS, Castillo turned to a personal friend inside tax agency for advice named Greg Roseman, the deputy director of IT procurement.

The House report called the relationship between Roseman and Castillo “cozy”,

Among thousands of pages of documents, House investigators uncovered dozens of text messages between Roseman and Castillo.

“Text messages … show that Castillo and Roseman had a long term friendship that extended well beyond a professional relationship,” the report said, adding that many of the messages were vulgar.

Investigators also found an email from Roseman to Castillo in February 2012, in which Roseman forwarded along a contact at the General Services Administration, where he had previously worked.

At the time, Castillo was trying to place his company on the GSA Schedule 70.

“I’ve talked to her and she will look into expediting,” Roseman told Castillo, referring to a supervisory contract specialist who “knew that the application was a priority for Greg Roseman,” the report said.

Prior to the report, the Federal Times previously sought to interview Roseman and submitted questions to the IRS, which did not respond. Inquiries to Castillo about his military experience also were not returned.

The company was placed on Schedule 70 after 50 days, while the average wait is 114 days, the report said.

“Greg Roseman’s relationship with Braulio Castillo was invaluable in helping Strong Castle win numerous contracts potentially worth hundreds of millions of dollars,” the report concluded. “Given its limited track record and lack of prime contracting experience in the federal government, Strong Castle likely would not have won the contracts.”

Last year, the Treasury Department named Signet as its small business prime contractor of the year.